Pathways to manufacturing growth available and achievable--Reality or wishful thinking?

A new Deloitte report says that the decline in the manufacturing industry can be reversed if America encourages innovation, trains workers, addresses tax reform and regulations, and invest in infrastructure and energy. Excuse me?

A new Deloitte report says that the decline in the manufacturing industry can be reversed if America encourages innovation, trains workers, addresses tax reform and regulations, and invest in infrastructure and energy. Excuse me? With all due respect, that’s like saying if the air was breathable on Mars and our bodies could adapt better, and shuttles left daily at 3:00 pm, a colony would open tomorrow.

The report titled Manufacturing Opportunity claims that while low-cost basic manufacturing won’t ever return to its former glory, further decline is not inevitable. Recommendations include refocusing on long-term opportunities in increasingly complex and emerging technologies and in our ability to lead in the innovation and R&D of such breakthroughs.I don’t disagree there.

What touches a nerve for me, and I’d like to know if it also does for you, is that they claim the “pathways to manufacturing growth are both available and achievable.” The report outlines recommendations based on interview with business leaders, academic communities and organized labor. Did anyone call anyone who operates right at the heart of these potential breakthroughs, or that could be responsible for attaining this growth?

Here’s what those interviewed came up with (in their words):

Invest in Research and Development:For America to regain its position as a global leader in manufacturing and revive economic prosperity, it must invest in the research and development needed to produce the advanced technologies used in the manufacturing sector.

Train Tomorrow's Workforce:Advanced training is required to meet the needs of manufacturing jobs. Today there are 600,000 jobs that cannot be filled in America because manufacturers cannot find workers with the right skills. A focus on performance-based education and fostering government-to-industry partnerships, among many other recommendations, can help better prepare new generations of workers.

Reform Taxes and Regulations:Numerous tax policies create a substantial burden for American manufacturers. In 2011, the United States had the highest corporate statutory tax rate among OECD (Organization for Economic Co-operation and Development) nations. It is the only G8 member that does not employ a territorial tax policy. Policymakers in Washington should address corporate tax reform and consider a tax system that positions U.S. businesses to be more competitive globally.

Invest in Infrastructure:Investment in infrastructure is paramount to manufacturing growth. Every dollar of infrastructure spending generates an additional 60 cents in economic activity. China, for example, recently devoted nine percent of its GDP to infrastructure development, while the United States has let much of its infrastructure deteriorate. Improved infrastructure facilitates a healthy manufacturing sector.

Define National Energy Policy: The definition of a national energy policy could ensure the reliability of fuel sources to power the manufacturing sector.

Am I having too much of a knee-jerk reaction to this report? In another life, I worked in the investment industry. It’s typical of those on the investment side to oversimplify steps to recovery and wealth creation based on historical economic swings without a real understanding of what is really operating within the industry they’re discussing. Personally, I’m not of the opinion that what’s happening is based on a typical economic cyclical climate. Where in the above list of suggestions is there any reference to where we are with the national debt, where we are with regulation, leadership (on any side of any aisle), tax incentives for offshoring, or even with our failing educational system. I’d take the perspective of the engineer responsible for such innovation, the opinion of those running the major technology companies able to do the investment, and those in charge of university R&D that is begging to be capitalized, over the view/opinions or the dictates of the “Street” any day.

Okay, I’m on a rant, but I’d really like your input on this. Maybe I didn’t have enough coffee this morning—or maybe you can add some perspective or wisdom that might calm me down…

While the article is right it is too short in catching the problem in my opinion. THE USA suffers the consequence of being a large island. What once used to be its strength is now working against it. The first big mistake results from their own placement. The land of god and the greatest and best. I remember while going for many many years to a large tradeshow in Las Vegas, Comdex. In the first years taxi drivers called it the greates and biggest show on earth. Over the years they added. "I have heard there is an even bigger show of the same king in Germany" The Hannover fair in Germany had to be split 2 times becauase it was growing too fast and is still growing.
How can the USA confront itself with reality when its self definition is defined as written enough even in the constitution!A rule to dream and keep the dream, because that is their selfunderstanding.
The USA should remember what made them strong in the 20th century! Tolerance, diversity and hard, hard work. The chance for everybody to achieve a bright future. This is today seen as socialism. God made the world in 6 days! Tea Party!Look just at the republican candidate, a shame for such a wonderful country!

If there are not binding protection laws for those that invest in R&D. then no amount of money will jump start our rebirth. In the end it will be stolen from offshore manufacxcturers with imunity and undermine anu US manufacturing until the inventors biz is bankrupt.

I agree overall with some steps suggested in the article for increasing manufacturing jobs in the US. I don't think it is all wishful thinking but the these steps will probably lead to timid growth, given the maturity of the globalization.
The comment on the infrastructure investment -that China's nine percent of its GDP to development its infrastructure, I don't think it is a fair comparison. In China's case these infrastructure may not have existed in the first place whereas in the case of US, it is largely an upgrade. The job growth from these two will be wildly different!
MP Divakar

Forgot to mention. We have many many technologies that need funding - it's not a lack of innovation that's the problem, it's the ability to fuel (money) its commercialization.. Technologies that will indeed produce great jobs. The problem is that VCs are investing in Chinese, not US startups.

Tax the rich? Pay any taxes at all would be nice. Offshore revenues are tax deferred until the money comes back, so it isn't. As far as skilled workers go, there are tons...just that nobody is willing to work for free while their discounted salary difference gets pocketed by execs and stockholders. Amazing how gullible engineers can be in believing the sleight of hand that comes from industry lobbyists. Drill for oil on public lands, then sell it to me for $5/gallon? Corruption at its finest.

It is true that many jobs have been lost because of the high cost of doing business in the US. Over the years, I have lost my job several times because companies I worked for could not compete with offshore companies and went out of business. So I know personally what it's like to be out of work because of offshore competition.
The report is right about a few things: Lowering the cost of doing business in the US (taxes, regulations), would help, along with an energy policy that results in lower energy costs. But when the current administration has a tax the rich policy, believes that corporations must be punished and has an energy policy that encourages higher prices, you aren't going to see a boom in US manufacturing anytime soon.

First get rid of the HR and expensive "hangers-on" services like the Deloittes accountants who write such guana to fill up their expensive billing hours. In embedded work, HR asks for a particular processor experience (often when the chip has only just launched). Take ARM, over 100 vendors, and some with over 200 variants, now within that, there is M0, M3, M4, A7, A8, A9, A15 etc, etc. While Wall Street demand higher returns than is reasonable, the employment will never happen for engineers. I've done my 35 years, and would not recommend it to anyone even if you do keep up. You are not portable. Go do architecture, medicine or other work where you are productive in a new environment from day one. Invest in infrastructure? A mediocre scope costs as much as a car, and has limited lifespan as technology speeds by and test equipment stagnates. Also, corporates don't pay much in the way of taxes; they acquire others with money they could of spent on organic growth. Sorry, I also didn't have enough coffee this morning, so I'm off to walk the dog.